SETTLEMENT AGREEMENT - Government of New Jersey

SETTLEMENT AGREEMENT

This Settlement Agreement (¡°Agreement¡±) is entered into among the State of New

Jersey (the ¡°State¡± or ¡°New Jersey¡±), including but not limited to the New Jersey

Department of Environmental Protection (¡°DEP¡± or the ¡°Department¡±); Accutest

Corporation, also known as Accutest Laboratories (¡°Accutest¡±); a corporation headquartered

at 2235 U.S. Highway 130, Dayton, New Jersey 08810, and doing business in the State of

New Jersey, through its authorized representatives; and Relator Koroush Vaziri (the

¡°Relator¡±). The foregoing parties are hereinafter collectively referred to as ¡°the Parties.¡±

PREAMBLE

As a preamble to this Agreement, the Parties agree to the following:

A.

WHEREAS Accutest is a member of a network of environmental testing

laboratories across the United States, each with a common parent owner. Accutest is

engaged in the business of environmental testing services, including but not limited to the

testing of semi-volatile organic compounds. The State and its agencies, including but not

limited to the DEP, have also contracted with Accutest to perform various environmental

tests that were performed in Accutest¡¯s extraction laboratory; and

B.

WHEREAS the Department issued a certification to Accutest to conduct

environmental laboratory testing under the New Jersey National Environmental Laboratory

Accreditation Program (¡°NJ-NELAP¡±) pursuant to The NELAC Institute (¡°TNI¡±) Standards.

(N.J. Certification #12129). See N.J.A.C. 7:18-1.4. Accutest is required to conduct testing in

accordance with the certification, the TNI Standards and N.J.A.C. 7:18; and

C.

WHEREAS on December 3, 4, 11 and 12, 2012, the Department conducted a

routine on-site audit of Accutest (¡°the 2012 Audit¡±) and issued a written report on February

19, 2013. On June 1 through 5, 2015, the Department conducted another routine audit of

Accutest (¡°the 2015 Audit¡±) and issued a written report on July 31, 2015. On September 4,

2015, Accutest submitted an Audit Response. The Department is currently reviewing the

Audit Response; and

D.

WHEREAS on October 8, 2015, the Department issued an Administrative

Order and Notice of Civil Administrative Penalty Assessment (¡°AO/P¡±) to Accutest. The

AO/P assessed a penalty of $224,500.00 for alleged violations of the TNI Standards and the

Department¡¯s regulations. The AO/P also noted that the Department was continuing its

investigation that Accutest allegedly engaged in deviations from EPA and DEP extraction

methods as described in H below; and

E.

WHEREAS on October 28, 2015, Accutest disputed the allegations in the

AO/P and filed a timely request for a hearing on the AO/P in the Office of Administrative

Law; and

F.

WHEREAS the Department contends that Accutest deviated from EPA and

DEP extraction methods during certain periods of time between 2007 and June 2013 in

violation of the TNI standards and N.J.A.C. 7:18-5.1(b) (the ¡°extraction violations¡±). The

alleged violations involved the following methods: USEPA SW846 3510, USEPA SW846

3545, USEPA SW846 3550, USEPA 625, and NJDEP EPH. The DEP contends that

Accutest employees did not always perform the required number of extractions, potentially

preventing the full extraction of all of the compounds in the samples; and

G.

WHEREAS, although the Department contends that the alleged extraction

violations referenced in Paragraph F may have occurred, based upon the Department¡¯s

Page 2 of 25

85614461\V-1

investigation and assessment, the results of the analyses conducted by Accutest are useable;

and

H.

WHEREAS on or about April 4, 2013, Relator filed a qui tam action in the

United States District Court for the District of New Jersey captioned United States of

America, et al., ex rel. Koroush Vaziri v. Accutest Laboratories, Civil Action No. 3:13-CV02223-FLW-TJB pursuant to the United States False Claims Act, 31 U.S.C. ¡ì 3729(a) et seq.

(¡°USFCA¡±), the New Jersey False Claims Act, N.J.S.A. ¡ì 2A:32C-1 et seq. (¡°NJFCA¡±), and

the false claims acts of several other states, and then subsequently filed an Amended

Complaint on or about October 9, 2014 (the ¡°Civil Action¡±). The Civil Action alleges that

Accutest violated the NJFCA, by not following appropriate EPA guidelines in the extraction

and testing of certain compounds. Specifically, the Civil Action alleges that some line-level

technicians in Accutest¡¯s Extraction laboratory did not fully comply with the Standard

Operating Procedures for extractions, and that line-level analysts in Accutest¡¯s Semi-Volatile

Organics Laboratory did not properly calibrate the gas chromatography/mass spectrometry

(¡°GC/MS¡±) instruments or maintain instrument data files, and thereby knowingly presented,

and caused to be presented, false claims to, among other entities, the State, and made or

used, and caused to be made or used, false records or statements material to false claims

made to the State, and conspired to do the same; and

I.

WHEREAS, by allegedly engaging in the foregoing conduct with respect to

tests paid for by the State, the State contends that Accutest knowingly deviated from EPA

and DEP extraction methods identified in Paragraph F above, and therefore, presented, and

caused to be presented, false claims to the State, and made or used, and caused to be made or

used, false records or statements material to false claims made to the State, and conspired to

Page 3 of 25

85614461\V-1

do the same. The contentions in Paragraphs F, H I, and K are hereinafter referred to as the

¡°Covered Conduct¡±; and

J.

WHEREAS Relator¡¯s complaint was served on the Office of the Attorney

General of the State of New Jersey (¡°Office of the Attorney General¡±) on or about October

22, 2014 pursuant to the NJFCA, and the Office of the Attorney General thereafter

commenced an investigation in connection with the allegations of the Relator¡¯s complaint;

and

K.

WHEREAS, on November 23, 2015, Accutest informed the Department that

it conducted an internal audit that revealed that it had been performing analyses beyond the

scope of their certification in violation of TNI Standard V1M2 5.4.1 and N.J.A.C. 7:182.12(a). Such analyses included 97 analytes/parameters in drinking water, non-potable

water, and solid/hazardous waste out of roughly 2,300 such analytes/parameters evaluated by

the laboratory; and

L.

WHEREAS, as a result of its investigations, the State contends that it has

certain civil and administrative claims against Accutest under the NJFCA and the

Regulations Governing the Certification of Laboratories and Environmental Measurements,

N.J.A.C. 7:18-1 et seq.; and

M.

WHEREAS, to avoid the delay, uncertainty, and expense of protracted

litigation of the above claims, the Parties have determined and hereby agree that settlement

is in each of their best interests, and the Parties have agreed to accept the terms of the

Agreement; and

Page 4 of 25

85614461\V-1

N.

WHEREAS, Accutest has represented to the State that it is engaged in

discussions concerning a merger with or sale to another entity, which may occur as soon as

December 31, 2015; and

O.

WHEREAS, the Parties enter into this Agreement without trial or

adjudication in order to amicably resolve the alleged Covered Conduct without any

admission of law or fact by any Party provided, however, that in the event of any other

environmental laboratory violations by Accutest, the Department may consider the violations

cited herein as having been proven for purposes of calculating the appropriate penalty level

and specifically for the purpose of determining whether a prior similar violation has

occurred, unless the merger with or sale to the other entity occurs as discussed in Paragraph

N above, and then no enhancement for alleged prior violations shall apply. See N.J.A.C.

7:18-10.5(b), -10.5(c), -10.5(e)(1), -10.5(e)(2).

NOW THEREFORE, in consideration of the mutual promises and obligations of the

Agreement, the Parties agree fully and finally to settle the Civil Action and the matters

described above pursuant to the Terms and Conditions below:

TERMS AND CONDITIONS

1.

Accutest shall take whatever actions are necessary to achieve and maintain

compliance with the Regulations Governing the Certification of Laboratories and

Environmental Measurements, N.J.A.C. 7:18-1 et seq. and the TNI Standards.

2.

Accutest shall correct the alleged violations found in the 2015 Audit that are

set forth in the AO/P and the violations identified in Accutest¡¯s internal audit in Paragraph K

above. The Department agrees that it will not assess any additional penalties for this past

conduct. However, the Department considers the requirements to correct these violations as

Page 5 of 25

85614461\V-1

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download